Compromise Agreements Ltd (“CA Ltd”), an employment law firm which acts for claimants, is seeking to apply for judicial review of the Government’s decision to impose a cap of one year’s salary on unfair dismissal compensation in addition to the existing £74,200 limit. CA Ltd considers that the additional cap ‘represents a disproportionate response to the concerns of the Secretary of State to limit compensation awards to employees who have been unfairly dismissed’.

CA Ltd argues that older people are more likely to be out of work for more than a year, and therefore would be eligible for more than a year’s salary as compensation, were it not for the new cap. As a result, CA Ltd considers that the cap indirectly discriminates against older people. They also comment that where an unfairly dismissed claimant is unable to find work for over one year but can only recover one year’s compensation, the state may end up supporting that claimant in the form of benefits, rather than the employer actually responsible for the unfair dismissal in the first place.

Comment

Paul Burton Employment Associate says, “This is another set of judicial review proceedings following on from the two already taking place regarding tribunal fees. Like the current reviews, it is unlikely to succeed, but does give the government an additional headache and may lead it to generally review the changes to employment law it has made over the last year or so.”

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